JBS (NYSE:JBS) reported record second-quarter sales of $24 billion as its diversified protein operations helped offset continued pressure in U.S. beef markets, while management outlined a leadership transition and a new Southeast Asia growth platform.
Adjusted EBITDA totaled $1.43 billion under IFRS, representing a 6% margin, and $1.3 billion under U.S. GAAP, or a 5.3% margin. Adjusted net income was $218 million, or $0.20 per share. The company reported a net loss of $102 million, or negative $0.10 per share, which CFO Guilherme Cavalcanti said reflected higher financial expenses and several non-recurring items.
“Our priorities are clear: improving efficiency, protecting margin and strengthening commercial performance, allocation production to the markets where we create the most value,” Tomazoni said.
Leadership Transition and Southeast Asia Partnership
Tomazoni said he will continue leading JBS through the transition period before Wesley Batista Filho assumes the role of global CEO in January 2027. Batista Filho, currently CEO of JBS USA, said the company’s strategic direction will remain consistent.
“You should not at all see JBS have a big change in the strategy, in the way we do things,” Batista Filho said, citing his more than 10 years of work alongside Tomazoni.
JBS also recently announced a strategic partnership with Danantara Investment Management. Danantara will make an initial $2.5 billion investment for a 25% stake in JBS’ Australia and New Zealand operations. Tomazoni said the joint venture is expected to provide access to as much as $5 billion for acquisitions, greenfield projects and other growth opportunities in Indonesia and Southeast Asia.
The Australia and New Zealand operations will remain fully consolidated by JBS and continue under the existing leadership and operating model, management said. Cavalcanti said the structure is intended to support expansion in the region without adding pressure to JBS’ consolidated balance sheet.
U.S. Beef Improves, but Supply Remains Tight
JBS USA’s beef business remained under pressure from tight cattle supplies and historically high cattle costs, but Batista Filho said performance improved meaningfully. The unit’s EBITDA margin improved to negative 1.3% from negative 3.9% in the prior-year quarter.
Management attributed the improvement to better plant performance, operating-footprint optimization, commercial initiatives and productivity gains. JBS combined two previously separate U.S. beef business units, which Batista Filho said should create commercial and operating synergies.
The company is emphasizing sales of ground beef, value-added ground beef and other value-added items. JBS had previously announced the closure of its Souderton facility, but Batista Filho said the company reversed that decision and will operate the site as a value-added facility due to demand for those products.
Batista Filho said much of JBS’ targeted 3% improvement plan for U.S. beef has yet to be realized. He also pointed to the expected reopening of Mexican cattle import channels as an important potential support for U.S. industry supply.
The Port of Douglas in Arizona is expected to open first and could handle an estimated 300,000 to 400,000 head annually, according to Batista Filho. If two additional ports in New Mexico open, the three locations could handle more than 1 million head of cattle flow, he said. JBS expects cattle availability for slaughter to begin increasing during the first quarter of 2027, with volumes returning closer to normal levels by the second quarter if the reopening proceeds as expected.
Batista Filho also said U.S. herd rebuilding has been more subdued than expected, though he believes the herd’s decline has stopped for now. He noted that cow slaughter has declined sharply from 2022 levels and said JBS has seen encouraging anecdotal signs of heifer retention and herd rebuilding in Canada.
Chicken, Pork and Brazil Operations
In U.S. pork, JBS reported an EBITDA margin of 8.9%, up from 6.5% a year earlier, despite softer market conditions. Batista Filho said demand for pork was weaker than for chicken and beef, with some pressure in prepared foods and from processors. He said it was too early to characterize the quarter as a longer-term trend.
U.S. chicken supply increased 4.5% in the second quarter, exceeding industry expectations, Tomazoni said. He attributed the increase partly to better bird survival rates compared with the prior year, when respiratory disease and low-pathogenic avian influenza increased mortality. Management expects the industry to adjust supply in coming months.
Tomazoni said Pilgrim’s Pride faced particular pressure in big-bird commodity chicken, which represents about 25% of its business. However, he said demand for retail-oriented case-ready chicken remained strong as consumers shifted more consumption toward eating at home.
In Brazil, JBS Brazil generated adjusted EBITDA of $269 million under IFRS and a 5.9% margin. Tomazoni said the unit posted its highest second-quarter EBITDA despite elevated cattle prices, supported by export demand and commercial execution.
China remains an important destination for Brazilian beef, but Tomazoni said Brazil is expected to resume production for China in October, with shipments restarting in November. The commercial impact of those shipments is expected primarily in 2027 because of transit times. He said there is no alternative market capable of fully absorbing the roughly 150,000 tons previously exported to China during the affected period.
Seara’s margins declined sequentially but remained at what Tomazoni characterized as healthy levels of roughly 14% to 15%. He attributed the weaker comparison mainly to lower pork prices and softer domestic-market conditions. Still, management said demand for chicken and value-added products in Brazil remained strong.
Cash Flow, Liquidity and Leverage
Free cash flow improved $185 million year over year to positive $130 million, compared with a cash outflow of $55 million in the second quarter of 2025. Cavalcanti said the improvement was driven largely by working-capital movements, including higher receivables discounts and larger advance payments from Chinese customers related to Brazilian exports.
The company expects approximately $2 billion in capital expenditures during 2026, $400 million below its initial estimate. Cavalcanti said JBS expects 2026 cash-flow breakeven EBITDA of $5.1 billion.
Net leverage ended the quarter at 3.1 times EBITDA, slightly above JBS’ long-term target range of two to three times, following a $1 billion dividend payment in June and typical first-half cash consumption. Cavalcanti said the company expects leverage to finish the year at roughly the same level, slightly above 3 times.
JBS increased its revolving credit line to $4.2 billion from $3.5 billion in August, while reducing the facility’s cost. Total cash liquidity, including the revolving facility, was approximately $7.7 billion. The company said its average debt maturity was 15.3 years, with an average cost of 5.7%, and it has no significant debt maturities before 2031.
About JBS (NYSE:JBS)
JBS SA is a global leader in the production and processing of meat products, with a focus on beef, pork and poultry. Headquartered in São Paulo, Brazil, the company operates through an extensive network of owned facilities and partnerships that span the Americas, Europe and the Asia-Pacific region. JBS supplies fresh, frozen and value-added protein solutions for retail, foodservice and industrial customers, and is active across the entire supply chain—from livestock procurement and feed production to slaughtering, processing, packaging and distribution.
Founded in 1953 by José Batista Sobrinho in Anápolis, Goiás, JBS began as a small slaughterhouse and expanded rapidly through strategic acquisitions and organic growth.
